Advocates and opponents of the plan to create a separate civil court system for business versus business disputes made their arguments to the Texas House Judiciary and Civil Jurisprudence Committee Tuesday.
The half-hour hearing featured nine speakers, including legislation sponsor Rep. Brooks Landgraf, who provided their predictable positions. Members of the committee asked almost no questions.
Rep. Landgraf said the creation of a business-only trial court with statewide jurisdiction would “help foster a business friendly” environment in Texas. He said the current system “puts Texas at a competitive disadvantage” with states such as Delaware and New York, which already have such courts in place.
The proposal would implement a modified version of the Delaware Chancery Courts for complex commercial disputes in which $10 million or more in damages is being sought. Unlike Delaware, the Texas business courts would still have juries decide questions of fact.
“This is an important but modest proposal,” Baker Botts partner Evan Young told committee members.
Young, who noted that he was speaking on behalf of the Texas Business Law Foundation and not his law firm, said House Bill 1875 will reduce overcrowding in the current Texas district courts, “develop consistent and reliable case law,” and will benefit restaurants, hotels, Uber drivers and litigation support companies because it would bring more complex commercial litigation to Texas.
Texas Trial Lawyers Association President Jim Perdue Jr. told the committee that the Texas Association of Defense Counsel, the Texas Chapter of the American Board of Trial Advocates and the TTLA oppose HB 1875 because they believe it is unnecessary and undermines the current district judges who are elected. The judges on the business court would be appointed by the governor.
“This is not a modest proposal,” Perdue said.
Grace Weatherly, who is past president of Texas ABOTA, said the proposal is an “irresponsible spending of money.”
“This legislation implies that our district judges are not doing their job and are not competent,” said Weatherly, a lawyer in Denton County. “Our courts are very well prepared to handle the most complex disputes.”
National Oilwell Varco Deputy General Counsel Brent Benoit told the committee members that the problem is not current district judges in Texas.
“The problem is the system,” he said. Not creating a business court would be “bad for business, bad for business litigation and bad for Texas.”
Austin lawyer Dan Richards, who represents companies involved in litigation, said he has “never had a client ask me why there are no business courts in Texas.”
“I find it offensive to claim that our judges are not qualified,” he said. “If I liked the courts in Delaware, I would move to Delaware. I like Texas.”
The House Judiciary Committee took no vote today and the chair did not say when a vote would take place.
The hearings were notable for two items that were not discussed: HB 1875’s creation of a business-only appellate court system and the need for more funding for sitting judges to hire briefing attorneys, which the judges in Delaware have.